In a move to navigate through economic uncertainty, the Bank of Canada has lowered its benchmark interest rate by 25 basis points, bringing it down to 3%. This decision comes as Canada faces potential trade tariffs from the United States.
The central bank also released an outlook report highlighting \"more-than-usual uncertainty\" stemming from the evolving policy landscape, particularly the looming threat of tariffs from the new US administration. Additionally, the Bank of Canada has adjusted its growth forecasts downward for 2025 and 2026.
\"In the absence of new tariffs, growth is forecast to strengthen, and inflation remains close to 2 percent. But the threat of new tariffs is causing major uncertainty,\" the central bank stated.
Amid these developments, Canadian Foreign Minister Melanie Joly highlighted that despite a recent meeting with US Secretary of State Marco Rubio being described as \"positive,\" it's still unclear whether the proposed tariffs will be implemented as early as this weekend. Joly assured that Canada is prepared to retaliate if necessary.
The uncertainty escalated last week when US President Donald Trump indicated plans to impose a 25% tariff on all Canadian imports starting February 1. However, the White House has yet to officially confirm these tariff rates.
